Trade Recommendation: Tezos (XTZ)
Tezos (XTZ/BTC) is in an interesting position as it tries to carve a bottom. On June 29th, the pair recorded a fresh 2019 low of 0.00007963. At that point, the cryptocurrency appeared to have more downside potential as the price was way below key support of 0.0001.
Nevertheless, bulls mustered the strength to reclaim key support of 0.0001 on July 21st. The recovery of the support ignited a rally that launched Tezos to as high as 0.00014187 on August 1st. While Tezos has been pulling back since, it now opens the opportunity to consider the market at a solid entry point.
Technical analysis shows that XTZ/BTC appears to be forming an ascending channel. This is a bullish pattern suggesting that the asset is bound to form higher highs and higher lows. So far, Tezos seems to have formed a second higher low and is en route to rally and print a second higher high.
We have this view because bulls did not allow the bears to breach support of 0.0001 during the recent correction. Price action favored the bulls because there are three supports keeping the market from falling further. We have the horizontal support at 0.0001, the diagonal support of the ascending channel, and the 50-day moving average. Thus, we have a setup indicating that Tezos is ripe for bottom-picking.
The strategy is to buy as close to 0.0001 as possible. If bulls can stay above this level as expected, it is likely that XTZ/BTC will rally to our target of 0.00015.
The process may take more than a month.
Daily Chart of Tezos/Bitcoin on Bitfinex
Summary of Strategy
Buy: As close to 0.0001 as possible.
Disclaimer: The writer owns bitcoin, Ethereum, and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
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